NEW DELHI: The government does not have any immediate plans to cut import duty on sugar as the country would have sufficient supply of the sweetener considering fall in consumption this year and a likely bumper crop next year.
The government is also keeping a close watch on sugar futures trading to keep a check on speculative activity and ensure no spike in retail price, which at present is Rs 40/kg.
The import duty on sugar at present is 40 per cent and no overseas purchase is taking place.
"I don't think we would have to import sugar as we are going to have adequate stocks in the domestic market. So, there is no question of reducing the import duty at this point of time," a senior Food Ministry official told PTI.
There has been a fall in sugar consumption in the last two months by 4-5 lakh tonnes. So, this year's total consumption would actually come down to last year's level of 25 million tonnes from the earlier projection of 25.5 million tonnes for 2016-17 marketing year (October-September), the official said.
Whereas the sugar supply would be 30.2 million tonnes for this year, including 7.7 million tonnes of carry over stock and 22.5 million tonnes of domestic output for this year.
Already, mills have manufactured 8 million tonnes of sugar in the last three months of this marketing year.
In view of likely drop in consumption level, the country is going to have a surplus stock of 4-5 lakh tonnes at the end of this year, which is sufficient to meet the demand in the beginning of the next marketing year from October 2018.
That apart, the official said, "Most of them are estimating bumper sugar output of 26-27 million tonnes for next year as good monsoon has boosted sugarcane production."
Even sugar mills are expected to start crushing operations earlier in 2017-18 and hence there might be enough supply of sugar in the market, he said.
On sugar futures trade, the official said, "About 5,000 tonnes a day is traded on the futures platform, which is a very small quantity. But we are monitoring sugar prices to check speculation."
The official said that no traders would like to buy from the futures market and hoard it for long as there is stock limit in place on wholesale and retailers till April 2017.
India, the world's second biggest producer, had produced 25.1 million tonnes of sugar last 2015-16 marketing year.
Source: economictimes.indiatimes.com